Or Patreanu Invest : In the VOD (video on demand) arena, we are in the middle of some fascinating years. Movies, series, documentaries and reality shows – all of these are experiencing a continuous boom in recent years, with a 6% increase in investment in content in 2022 to a level of 238 billion dollars.
At the same time, the streaming media market is also experiencing incredible growth, and is expected to grow, according to data published at the beginning of August this year by the research company Reportlinker.com from 119 billion dollars this year to almost 174 billion dollars in 2028, at an average annual growth rate of 7.86%.
All of this is happening mainly because of SVOD, the same subscription VOD providers like Netflix, Amazon Prime, Disney, Apple TV and HBO Max, which have completely changed the economics of the film and television industries – and in fact created alternative investment opportunities for investors that simply weren’t there before .
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“Friends” marked the way
For the first time: IBI is establishing a content investment fund Or Patreanu Invest
“Friends” marked the way
Everything changed, or began to change, in one surprising deal signed in 2015. “Friends”, the situation comedy that scorched the television screens and made millions laugh in the nineties, has been sold to Netflix a decade after it ended. The streaming rights cost Netflix no less than 100 million dollars, but the deal paid off in a big way: “Friends” was and remains today one of the most watched series on Netflix, in all the countries where it operates.
The “Friends” deal and many similar deals that followed it turned the world’s television and film content into real business opportunities. Those who knew how to identify the successful ones and invest in them during the production stage, earned a lot of money. Little by little, Content Funds are emerging in different parts of the world, which invest in promising content ventures in the script or even concept stages, with the aim of reaping handsome profits later on.
Content investments, by the way, are not limited to English-speaking content from the US or the UK. The next big content hit can come from any corner of the world today, as series such as “The Paper House” (Spain) or “The Squid Games” (South Korea) have already proven to us. The new rules of the game oblige the players in the field to constantly stretch the limits of their abilities, trying to find the next thing.
Indeed, the SVOD companies, as well as the largest media groups in the world, record very high levels of investment in content this year as well. Disney leads with an annual investment of more than 10 billion dollars. Warner Bros. Discovery, which this year embraces the cinematic hit “Barbie” (revenues of almost 1.3 billion dollars as of the end of August), is not far from it with an investment of 9.7 billion dollars a year.
Netflix, on the other hand, invested just under 8 billion dollars in content this year and has already announced that it will not increase its investments in the next two years. Apparently, this is not encouraging news for those interested in investing in VOD content. These investments are also expected to grow this year at a moderate rate of 2% from year to year, according to the estimates of the research company Ampere Analysis.
Is this a problem? exactly the opposite. In fact, it’s about targeting the opportunity: SVOD companies and media giants are in an ongoing race from the 2020 Corona outbreak to satisfy the unprecedented global appetite for VOD content. The days when we all locked ourselves in our homes and connected to screens illustrated the human need for available content – and the rest is history. If before the pandemic streaming content accounted for about 73% of the Internet traffic, in 2022 this figure will increase to about 82%. Or Patreanu Invest
This is the important point: the SVOD companies and the media giants have no choice but to constantly increase their investment in content, since they are fighting for the time of content consumers against giants such as YouTube, Meta (Facebook), Tiktok and Snapchat. In order to stay in the game, they will no longer be able to continue investing everything themselves, but will have to start bringing in investment entities such as content funds to invest in new content ventures. Or Patreanu Invest
A win-win may be created here, where the SVOD companies can also use creative “currencies” such as territorial broadcasting rights. If, for example, a TV series is broadcast in 28 countries (territories), Netflix can limit itself to 8 territories and let investors rake in revenue and profits from the series in the other 20 territories. In this model, the success of the series translates immediately to the direct success of all the parties that invested in it. Or Patreanu Invest
Bottom line, successful TV shows and movies are products that will always be with us, and will probably only grow in various parameters such as budgets and profits. A wise investment in them may bear handsome fruits for years.
For the first time: IBI is establishing a content investment fund – Or Patreanu Invest
The IBI investment house sees strategic importance in offering a wide range of solutions to investors. In our estimation, there are real global content opportunities today and the current timing leads to our entry into this field: IBI will soon establish a content investment fund with a strategic collaboration with Fremantle, one of the world’s leading content production and distribution companies. As part of the collaboration, we will establish an investment fund to finance a portfolio of content productions of international series and films. The fund will work closely with Fremantle, its portfolio of labels, producers, directors and talent, to confirm funding for projects and provide the best route to their marketing. Investors in the fund will benefit from IBI’s permanent service package, which includes close supervision, professional service, a risk management system, research, decision support tools and more.
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